Foreign investors will be invited to hold complete ownership in Jordan

The government is looking into relaxing foreign ownership restrictions by allowing non-Jordanian investors to completely own projects and services in certain sectors. Minister of Planning and International Cooperation Mary Kawar made this announcement during the opening panel of the London initiative, held in London on February 28.

According to the current legislative structure, the ownership regulations for foreign investment or the regulations for regulating non-Jordanian investments fix the percentage of the requisite Jordanian capital participation and grant the non-Jordanian investors the right to hold only 51 per cent, or 49 per cent in specified economic sectorial projects and services. On the other hand, the same regulations reserve certain economic sectors for a complete Jordanian capital participation and deprive non-Jordanian investors from holding any percentage due to national interest reasons. However, the current regulations keep the window open for non-Jordanian investors to increase their fixed percentage in any of the economic projects and services, only if such economic projects and services enjoy special importance in the opinion of the Jordanian council of ministries.

The news which the government announced during the London initiative comes at a challenging time for the Jordanian economy amid an increase of unemployment rate among Jordanians. The preliminary analysis indicates that such a move will stimulate the inflow of foreign capital into Jordan and will pave the way for job creation.

The anticipated regulatory changes will allow the new incoming investors to enjoy complete business control and operation. However, there are many questions, concerns and uncertainty by Jordanian investors around this move in that such a move may have a negative effect on current partnerships between Jordanians and non-Jordanian investors in connection with the ongoing arrangements under the current regulations in the event that non-Jordanian investors currently operating under the 51 per cent and 49 per cent are given the opportunity for a complete ownership under the new regulations once amended. The current regulations preclude non-Jordanian investments, licenced and approved prior to the date of entry into force of the said regulation back in 2016, to benefit from any privileges granted to new licenced and approved non-Jordanian investments after the entry of the current regulations into force back in 2016. It is not clear whether or not the government will keep such restrictions in the new amended regulations. Therefore, the pros and cons of such a move should be carefully examined, legally and economically.

Regulatory changes are underway. However, there is no clear timeframe on when the new amendments to the said regulations will be introduced.

The writer is an attorney and counselor-at-law. He contributed this article to The Jordan Times